Personal Injury Claims and Medicare
Medicare, Medicaid and Schip Extension Act of 2007 requires that insurance carriers, plaintiffs and personal injury attorneys protect medicare’s right of reimbursement.
Furthermore, in workers’ compensation cases, the law requires funds to be set aside for future medical expenses through a medicare’s set-aside.
Upon settlement, personal injury attorneys need to request a final lien letter which includes the the final amount of reimbursement sought by medicare.
Personal injury lawyers and plaintiffs can lock-in an amount for up to 3 months which is helpful during negotiations because it gives the parties certainty before a final agreement is due.
Plaintiffs need to know this information as much as their lawyers because it affects the value of their claim. At the end of the day, all plaintiffs need to know is what they take home and not so much the total recovery. A medicare lien reduces the net amount due to the plaintiffs and must be satisfied or otherwise creates future liability for the plaintiffs.
Medicare liens in personal injury claims can be negotiated down from the claimed amount just like other insurance providers. But every case is driven by the facts. The percentage of reduction offered by medicare varies.
Failure to investigated Medicare liens prior to settlement could also lead to delays in payments which neither the plaintiffs or injury lawyers want. The insurer is likely to withhold payment until medicare liens are resolved.
Once a settlement agreement is entered, plaintiffs have 60 days to pay or unless they may incur interest charges.
If there is a disagreement as to the payment of a lien it is likely that a lawsuit may be filed requesting the court to rule on how to disburse the settle funds. I recall a particularly difficult medical malpractice case where the medicare lien was in excess of $1 million dollars. In that case the client was having a difficult time with the fact that they had to pay such a big part of the settlement to medicare and were pushing for a bigger discount than medicare offered.